In insurance, what is meant by 'premium'?

The term 'premium' in the context of insurance refers to the fee that a policyholder pays to the insurer in exchange for coverage. This payment is typically made on a regular basis, such as monthly or annually, and serves as the basis of the insurance contract. The premium is calculated based on various factors including the type of coverage, the insured risk, and the policyholder's history.

This payment grants the policyholder access to the insurer's financial protection against specific risks outlined in the insurance policy. In essence, the premium is what provides the policyholder with insurance coverage, ensuring that they can file claims for losses that occur within the policy's terms.

The other options relate to different aspects of the insurance process but do not define the term 'premium'. The total claim amount pertains to what the insurer pays out when a claim is filed, while the value of the insured property refers to the amount that the insured asset is worth. Compensation for loss incurred describes the payment made by the insurer after a claim is validated but does not represent the cost of obtaining insurance coverage.